KATHMANDU: Nepal’s financial history has currently reached a harrowing and insecure juncture where bankers tasked with safeguarding billions in deposits and investments are beginning to feel profoundly unprotected by the state.
Rashmi Pant, the Chief Business Officer of Prabhu Bank, has been arrested. She was taken into custody over alleged irregularities in a loan extended to Asian Village Resort Pvt. Ltd., located in Rupandehi. The chairman of that company, Shashidhar Sharma Paudel, is already in the custody of the Central Investigation Bureau (CIB) as part of the ongoing investigation. A two-day extension has been added to Pant’s detention. In connection with the exact same episode, 58-year-old Shashidhar Sharma of Rupandehi, the chairman of Asian Village Resort Pvt. Ltd., had earlier been taken into custody. The CIB had brought him under control on July 14.
Pant is a professional banker, not a bank owner or promoter. She executed institutional decisions based on the advice of the board of directors and legal counsel. Subjecting an ordinary employee to criminal charges for executing institutional decisions has deeply startled the new generation aspiring to take leadership roles within the banking sector.
Now, no CEO, DCO, CCO of any bank will dare to take risks and invest loans into major infrastructure projects or pursue aggressive recoveries. This has heightened the risk that even if liquidity exists in the market, investment will not happen, thereby bringing overall economic growth to a complete standstill.
Particularly in major projects where project assets are pledged as collateral, banks will now think ten times before investing in such sectors.
While this fast-paced operational style of the CIB may gain temporary traction in the media, the long-term damage it inflicts is immense. The fear that “even making professional decisions in Nepal can land you in jail” has severely eroded international confidence in Nepal’s business environment.
The CIB’s targets have consistently received backing from Governor Bishwanath Poudel. A confidant of Arzu Rana, Bishwanath Poudel was also close to former Finance Minister Bishnu Prasad Poudel. Arzu led Poudel forward by showing him various allurements and ambitions; Bishwanath Poudel is a manager who handles accounts for some of Arzu Rana Deuba’s businesses. Even before becoming the Vice-Chairman of the National Planning Commission, he had established a strong grip inside Baluwatar under Arzu’s patronage. Although he secured an election ticket by blocking Swarnim in Chitwan but failed to win the election, that very same Bishu bagged a landslide victory to become the 18th Governor of the Central Bank.
Under the governor Paudel leadership in Central Bank, the tendency of “locking people up first, and listening to them later” has created a situation where prestige must be given a funeral in Nepal’s corporate world. Procedural errors can happen in any commercial decision, but viewing them through the lens of a criminal offense and throwing people straight into jail cannot be justified as fair. In this entire episode, the role of the regulatory body, Nepal Rastra Bank, also appears equally suspicious.
The tendency to brand individuals as criminals even before they are proven guilty has driven the morale of bankers and businesspersons down into the abyss. When the private sector and the financial sector, which are considered the backbone of the economy, are terrified, the pace of the country’s development naturally grinds to a halt. Right now, exactly that is happening. As wave after wave of pressure strikes industrialists, businesspersons, and bankers, the self-confidence of the commercial sector has vanished, which will inevitably exert a direct adverse impact on the nation’s revenue and job creation.
It has started to feel as though the profession of a “banker”-once considered the most prestigious, respected, and credible in society-has now turned into a soft target for the police. The recent series of crackdowns initiated by the Central Investigation Bureau (CIB) of the Nepal Police against high-ranking officials of the banking sector has generated a severe psychological terror not only within the financial sector but across the entire economy.
Earlier, Prabhu Bank CEO Ashok Sherchan and other senior officials were similarly arrested. Who will compensate for their lost social prestige and mental anguish? This is the question the banking sector is asking the state today.
Banking is a business that runs entirely on public trust and reputation. The arrest of a single individual like Pant causes irreparable damage not just to the person, but to the institution she leads and the dignity of the entire banking system. The reputation of professional bankers like Rashmi Pant has been completely destroyed overnight.
The high responsibilities and financial risks borne by employees in the banking sector are immense. They ensure institutional stability through the protection of depositors’ funds, loan investments, risk management, regulatory compliance, and financial decision-making. To attract and retain such high responsibility and skilled manpower, taking calculated risks is essential.
Banks are prime partners in promoting entrepreneurship, expanding businesses, and driving economic development. Through loans, investments, trade finance, and other financial services, they make significant contributions toward establishing new industries, expanding existing businesses, accelerating job creation, and boosting economic activity. Therefore, the arrest and defamation of competent and experienced banking human resources severely damages overall trade growth.
Police intervention under the pretext that “the state suffered a loss even after the bank secured its investment” confirms both the helplessness of the central regulator, the Rastra Bank, and an overreach outside police jurisdiction. According to former Rastra Bank officials, if laws were broken in the process, the Rastra Bank should be held equally responsible; yet, here, only the bankers operating at the implementation level are being singled out as targets.
Respect for professional dignity, legal procedures, and personal reputation is equally imperative. This incident has made a complete mockery of the rule-of-law principle, which dictates that individuals should be summoned for investigation, documents collected, and custody executed only after sufficient evidence is gathered. If bankers are continuously picked up from the streets and shoved into detention cells while the reputations they built over years are turned to dust, Nepal’s financial system could soon crash into a severe disaster.
The shockwaves triggered by Rashmi’s arrest should teach the state a serious lesson that handcuffs are not the sole solution to problems. Maintaining good governance and legal clarity rather than criminalizing commercial decisions is the need of the hour. Otherwise, the terror spreading across the banking sector will ultimately push the country’s economy into utter darkness.
The study report submitted by the Banking Sector Reform Suggestion Task Force-coordinated by Dr. Rewat Bahadur Karki, an economist and former chairman of the Securities Board of Nepal-notes that banks and financial institutions harbor continuous complaints against the Rastra Bank. Prepared on the basis of discussions, interactions, written suggestions, past study reports, and analysis with concerned parties, organizations, and individuals, the study report points out even the shortcomings of the central bank.
Financial institutions complain that the Rastra Bank fails to make timely decisions, brings forth policies on a whim, displays a tendency toward excessive regulation and control, and engages in micro-management. Furthermore, they have complained that the central bank leaves written queries for policy clarity unanswered, interprets laws arbitrarily, and exerts improper pressure regarding staff recruitment and advertising in banks.
The task force has also suggested the formation of a grievance handling committee coordinated by an independent individual of clean reputation, such as a former judge or former governor. The report notes that the Rastra Bank has frequently made certain policies and decisions purely on a whim.
The report points out that instead of becoming progressively liberal while maintaining quality supervision, the Nepal Rastra Bank has appeared to move in an increasingly restrictive direction over the past few years.
Banks and financial institutions have expressed heavy grievances regarding the behavior and work style of the country’s central bank and its high-ranking employees and officials. Representatives of banks and financial institutions have complained that the Nepal Rastra Bank and its officials engage in stalling work and applying improper pressure.
Although Bishwanath Poudel lacks an inherent talent for strategic planning, he excels at rote memorization by cramming books. Because of this, he is unable to provide precise and clear answers on any given subject. Instead, while scattering information read and heard over a lifetime by connecting disparate contexts, he strays far from his own perspective. For this reason, while those who discourse on theoretical economics consider him a good man, those who collaborate with him in places where planning or formulating new visions takes place view him as talking nonsense.
However, by the time Sher Bahadur Deuba became Prime Minister for the fifth time, Bishwanath had successfully won Arzu’s trust and secured the opportunity to become the Vice-Chairman of the National Planning Commission. Initially embracing communist ideology, Poudel changed his outlook after completing his studies in China. Although Poudel returned to Nepal from America carrying capitalist ideologies, his social circle and interactions remained closely tied with high-ranking leaders of the CPN-UML.
Inside source said “Bishwanath-ji is everyone’s man and can after any extend to serve the interests. Yesterday, he formulated the budget during Bishnu’s tenure; he sat in the genuine team of Deuba and Arzu; after the Gen-Z revolution in September, 2025, Poudel became closest to interim leader Sushila Karki and began compiling a hit list of businesspersons associated with old parties; and later, when Prime Minister Balendra Shah (Balen) came to power, he aligned himself with that faction too, working according to Balen’s wishes merely out of a desire to cling to his chair,” financial officials remark from time to time. “Tomorrow, if a new force rises to power, he will fit right in there as well.”
